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Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: lawn maintenance and garden maintenance. The company charges customers $20.0 per hour for each
Gulf Shore Lawn and Garden Maintenance provides two general outdoor services: lawn maintenance and garden maintenance. The company charges customers $20.0 per hour for each type of service, but lawn maintenance has higher variable costs ( $12.0 per hour) than garden maintenance (\$6.0 per hour) because of fuel expenses incurred to operate lawn-mowing equipment. All employees are paid a fixed monthly salary. A contribution format income statement for a recent month for the two services appears below. During the month, 8,000 hours of lawn maintenance services and 2,000 hours of garden maintenance were provided: Required: 1. Compute the overall CM ratio for the company. 2. Compute the overall break-even point for the company in sales dollars. 3. Compute the weighted-average CM per hour for the company. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 4. Calculate the overall break-even point for the company in hours. 5. At the overall break-even point in total hours, how many hours of each service must be provided for the company to break-even? 6. Calculate the overall sales in dollars required to earn an after-tax profit of $44,800 if the tax rate is 30%
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